Annual Report 2007 - hci hammonia shipping ag

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The Company Management Report Financial Statements Notes(f) InventoriesInventories relate to lubricants held on board of seagoing vessels. The amount of inventories is determinedon the basis of a physical inventory stocktaking as at the balance sheet date. The inventories aremeasured at the lower of cost and net realisable value.If the reasons that resulted in an impairment of inventories no longer apply, the impairment loss isreversed.(g) Other provisionsProvisions are recognised whenever an obligation currently exists towards third parties as a result of apast event, and when the obligation is likely to result in a future outflow of resources that can be reliablyestimated. If a provision could not be recognised due to the fact that one of the above criteria was notmet, the related obligations have to be disclosed under contingent liabilities unless the probability thatpayment will be required is very low. Provisions for obligations are discounted when these obligationswill probably not result in an outflow of resources in the subsequent year. The carrying amount of theprovisions is reviewed on each balance sheet date.(h) Income taxesCurrent taxes are expensed as incurred at the amounts owed by the Group.Deferred taxes are recognised to account for future tax effects resulting from temporary differencesbetween the tax base of assets and liabilities and their related carrying amounts in the IFRS financialstatements, as well as on loss carryforwards. The measurement of deferred taxes is based on the taxlaws enacted at the end of the relevant financial year, and applicable to the financial years in which thedifferences reverse or loss carryforwards are probably utilised. Deferred tax assets on temporary differencesor tax loss carryforwards are only recognised to the extent that their recoverability is sufficientlycertain.Deferred taxes are recognised for temporary differences resulting from the fair value measurement ofassets and liabilities within the scope of acquisitions of companies. Deferred taxes for temporary differenceson goodwill as part of subsequent measurement are only recognised when goodwill is taxdeductible.Loss carryforwards are not taken into account in the determination of deferred tax assets in the contextof earnings contributions covered by taxation in accordance with Section 5a of the German Income TaxAct (Einkommensteuergesetz, EStG) (tonnage tax) within the framework of the separate and uniformdetermination of taxable income of the single-ship companies.As a result of the tonnage tax, differences between the tax base of assets and liabilities and their carryingamounts in the IFRS financial statements occurring at the shipping limited partnerships, are consideredpermanent differences.The carrying amount of deferred tax assets is re-assessed at each balance sheet date, and reduced tothe extent that it is no longer probable that sufficient taxable income will be available against which thedeferred tax asset can be partially utilised.Deferred tax assets and liabilities are netted if the Company has a legally enforceable right to set off currenttax assets against current tax liabilities, and the deferred taxes refer to income taxes of the sametaxable entity and levied by the same tax authority.46
Notes(i) Transactions in foreign currencyPurchases and sales in foreign currency are translated at the exchange rates applicable at the date oftransaction. Assets and liabilities in foreign currency are translated into the functional currency at theexchange rate prevailing on the balance sheet date. The underlying middle rate for the consolidatedfinancial statements of HCI HAMMONIA SHIPPING AG as at 31 December 2007 amounts to 1.4721USD/EUR. Any foreign exchange gains and losses arising on currency translations are recogniseddirectly in profit or loss.(j) Use of estimatesThe estimates and assumptions underlying the preparation of the consolidated financial statements ofHCI HAMMONIA SHIPPING AG affect the measurement of assets and liabilities, the disclosure of contingentassets and contingent liabilities at the relevant balance sheet dates, as well as the amount ofincome and expenses of the reporting period.In particular, the carrying amount of deferred taxes requires estimates to be made. There are uncertaintieswith respect to the interpretation of complex tax issues. Therefore, differences between the actualresults and our assumptions, or future changes to our estimates, may lead to changes of the taxableprofit in future periods.Further significant estimates and assumptions primarily relate to the determination of the useful life ofthe seagoing vessels, as well as their residual value at the end of the useful life.Within the context of preparing financial statements, the Group makes assessments and assumptionsconcerning expected future developments. The estimates derived from these assessments andassumptions will of course seldom match actual circumstances.(4) New accounting requirements issued by the IASBIn accordance with Regulation (EC) No. 1606/2002 in connection with Section 315a (1) of the GermanCommercial Code, the basis of accounting of the HCI HAMMONIA SHIPPING Group in accordancewith IFRS are the financial reporting standards of the IASB, as adopted by the European Commissionwithin the framework of the endorsement procedure for the European Union.The newly-issued IFRS, and amendments to existing IFRS made by the IASB, are required to be appliedonly after a corresponding resolution of the European Commission as part of the endorsement procedure.The following standards were applied for the first time with regard to the consolidated financial statementsof the HCI HAMMONIA SHIPPING AG as at 31 December 2007:■ Amendment to IAS 1 “Capital Disclosures”■ IFRS 7 “Financial Instruments: Disclosures”■ IFRIC 7 “Applying the Restatement Approach under IAS 29”■ IFRIC 8 “Scope of IFRS 2”■ IFRIC 9 “Reassessment of Embedded Derivatives”■ IFRIC 10 “Interim Financial Reporting and Impairment”The application of these standards did not materially affect the Group’s financial position and financialperformance, except for the application of IFRS 7 and IAS 1. The application of IFRS 7 requires extensivedisclosures on financial instruments with relevance for the assessment of the financial position and47
Page 2 and 3: Key figuresShip portfolioDate Capac
Page 4 and 5: Jens BurgemeisterMember of theManag
Page 6: The Company Management Report Finan
Page 9 and 10: Business aims and strategy / Busine
Page 11 and 12: Business modelThis will be guarante
Page 13 and 14: Business modelTEU pool managed by P
Page 15 and 16: The ShareThe ShareSuccessful stock
Page 18 and 19: The Company Management Report Finan
Page 26: The Company Management Report Finan
Page 29 and 30: Consolidated income statement / Con
Page 31 and 32: Consolidated cash flow statement /
Page 33 and 34: Consolidated statement of changes i
Page 78 and 79: Auditors’ ReportAuditors’ Repor
Page 80 and 81: Chairman of the Supervisory BoardTh
Page 82 and 83: Corporate GovernanceCommunicationHC
Page 84 and 85: Corporate GovernanceRemuneration Re
Page 86: HCI HAMMONIA SHIPPING AGBleichenbr

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